JOE

We rate ST JOE Co (JOE) as a Buy with a composite score of 66.0/100 at a current price of $69.89. The stock scores above average across the majority of our six quantitative factors and ranks #237 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in momentum (87th percentile) and quality (78th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and stability (58th percentile) tempers our overall conviction. We assign a No Moat rating (35/100), Low uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

ST JOE Co holds a top-quartile position (#12 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 66.0/100 places it at rank #237 in our full 7,333-stock universe. At $2.9B in market capitalization, ST JOE Co is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 44% and momentum in the 87th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 23th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 42% (-34.8pp vs sector) narrow to operating margins of 25% (+8.2pp vs sector) and net margins of 20.6%, yielding a gross-to-net conversion rate of 49%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $69.89, ST JOE Co is trading near fair value based on current fundamentals. Our value factor score of 67/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 40.0x (a 235% premium to the sector median of 11.9x), EV/EBITDA of 35.4x (at a premium), P/B of 5.4x, P/S of 8.5x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to ST JOE Co. The company exhibits strong financial stability with a beta of 0.68, and a stability factor in the 58th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.68 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 58th percentile and quality factor at the 78th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 42% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate ST JOE Co's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 13.4%, and the balance sheet is managed within acceptable parameters (D/E: 52%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; ST JOE Co falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 1.13% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, ST JOE Co receives a Buy rating with a composite score of 66.0/100 (rank #237 of 7,333). Our quantitative framework assigns a No Moat (35/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 63/100.

Our analysis supports a constructive view on ST JOE Co. The combination of the current valuation, low uncertainty, and standard capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.